Chapter 2 - Leadership
- Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious - but their ambition is first and foremost for the institution, not themselves.
Level 1 - Highly capable Individual, Makes productive contributions through talent, knowledge, skills, and good work habits.
Level 2 - Contributing team member, Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.
Level 3 - Competent Manager, Organizes people and resources toward the effective and efficient pursuit of predetermined objectives.
Level 4 - Effective Leader, Catalyzed commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.
Level 5 - Builds enduring greatness through a paradoxical blend of personal humiliy and professional will.
- In over three quarters of the comparison companies, we found executives who set their successors up for failure or chose weak successors, or both.
- When we systematically tabulated all 5,979 articles in the study, we found fewer articles surrouding the transition date for the good-to-great companies than for the comparisons, by a factor of two. Furthermore, we rarely found articles that focused on the good-to-great CEOs.
- Granted, the Scott Paper story is one of the more dramatic in our study, but it's not an isolated case. In over two thirds of the comparison cases, we noted the presence of a gargantuan personal ego that contributed to the demise or continued mediocrity of the company.
- Ten out of eleven good-to-great CEOs came from inside the company, three of them by family inheritance. The comparison companies turned to outsiders with six times greater frequency - yet they failed to produce sustained great results.
- Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, the credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.
- The great irony is that the animus and personal ambition that often drive people to positions of power stand at odds with the humility required for Level 5 leadership. When you combine that irony with the fact that boards of directors frequently operate under the false belief that they need to hire a larger-than-life, egocentric leader to make an organization great, you can quickly see why Level 5 leaders rarely appear at the top of our institutions.
- every good-to-great company had Level 5 leadership during the pivotal transition years.
- "Level 5" refers to a five-level hierarchy of executive capabilities, with Level 5 at the top. Level 5 leaders embody a paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company, not themselves.
- Level 5 leaders set up their successors for even greater success in the next generation, whereas egocentric Level 4 leaders often set up their successors for failure.
- Level 5 leaders display a compelling modesty, are self-effacing and understated. In contrast, two thirds of the comparison companies had leaders with gargantuan personal egos that contributed to the demise or continued mediocrity of the company.
- Level 5 leaders are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company great, no matter how big or hard the decisions.
- Level 5 leaders display a workmanlike diligence - more plow horse than show horse.
- Level 5 leaders look out the window to attribute success to factors other than themselves. When things go poorly, however, they look in the mirror and blame themselves, taking full responsibility. The comparison CEOs often did just the opposite - they looked in the mirror to take credit for success, but out the window to assign blame for disappointing results.
- One of the most damaging trends in recent history is the tendency (especially by boards of directors) to select dazzling, celebrity leaders and to de-select potential Level 5 leaders.
- I believe that potential Level 5 leaders exist all around us, if we just know what to look for, and that mayn people have the potential to evolve into Level 5
- Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated with going from good to great. Ten of eleven good-to-great CEOs came from inside the company, whereas the comparison companies tried outside CEOs six times more often.
- Level 5 leaders attribute much of their success to good luck, rather than personal greatness.
- We were not looking for Level 5 leadership in our research, or anything like it, but the data was overwhelming and convincing. It is an empirical, not an ideological, finding.